Lily pads can no longer be placed on water deeper than 1 block

Summary:
Lily pads can no longer be placed on water deeper than 1 block.

Steps to Reproduce:

1. Dig a 2 block deep hole

2. Fill the hole with water source blocks

3. Attempt to place a lily pad on top of the water

Observed Results:
Nothing happens.

Expected Results:
A lily pad is placed.

Video: